1. Field of the Invention
The present invention relates generally to the field of strategic planning and, in particular, to a system and method for aligning, managing and implementing an enterprise strategy.
2. Description of the Related Art
Strategy management is critical to the success of many organizations such as businesses, charities, government agencies and schools. Through a strategic planning process, the leaders of an organization attempt to clarify the organization's long-term goals and develop a plan for accomplishing those goals. A successful strategy anticipates future threats to the organization and positions the organization to take advantage of new opportunities that may arise.
The strategic planning process is time consuming, expensive and requires a complex analysis of the organization and its environment. As a result, the typical strategic planning process is implemented only once per year and only addresses a small subset of the issues that face the organization. A conventional strategic planning process for a business is illustrated in FIG. 1. A strategic planning committee is created from the business' senior management, and the members of the strategic planning committee conduct an audit of the business and its environment (i.e., an environmental scan) to determine the business' strengths and weaknesses (Step 2). A typical audit involves intensive data gathering from sources throughout the business organization, as well as sources external to the business. Next, the planning committee defines the organization's mission, vision and guiding principles (Step 4). A mission statement describes the present nature of the business, including the business' purpose and direction (i.e., the goals the business is trying to accomplish). A vision statement describes the desired future of the business, and guiding principles outline the values and philosophy of the business that guide the behavior of its personnel.
The planning committee compares the current state of the business, as determined by the environmental scan and the mission statement, to the business' desired future as identified in the vision statement and guiding principles. Based on this comparison, the planning committee identifies long-term goals, which define the changes the business should implement in order to achieve its stated vision (Step 6). The planning committee selects a manageable number of long-terms goals that are reasonable for the business to achieve and defines strategies for achieving these selected goals. The environmental scan, mission, vision, guiding principles and long-term goals and strategies are compiled into a formal strategic plan, which is used by managers throughout the organization to create operating plans directed towards accomplishing the organization's goals (Step 8). Managers and employees then implement the operating plans (Step 10). After creating the formal strategic plan, the planning committee disbands until the following year when a new strategic planning process will start.
The prior art strategic planning processes have many drawbacks. For example, the time, effort and expense required by the strategic planning process limit effective strategic planning to a once-a-year event that addresses only a small number of strategic objectives. Changes in the environment or refinements to the strategic plan are seldom considered until the next year's strategic planning process. As a result, organizations are slow to react to their environments, including environmental changes that may invalidate some of the assumptions underlying the current strategic plan.
To assist with the strategic planning process, many organizations retain large consulting firms. Typically, consultants are retained to guide the planning committee through the strategy formulation process, and leave the implementation of the strategy to the organization. A large organization may have numerous managers in various business units, departments and divisions, with each manager independently interpreting the strategic plan and attempting to develop an operating plan that achieves the strategic goals. To ensure that its managers are focused on achieving the enterprises' strategic goals, many organizations use a balanced scorecard (BSC) system. Through a BSC system, strategic goals are described in terms of metrics that must be met in order to achieve the strategy. These metrics are passed to the managers who develop operating plans to achieve these metrics.
Although a BSC system may simplify strategy planning and implementation, relying on a BSC system has many drawbacks. For example, an entire strategy can seldom be described completely in terms of numbers and there is usually a “gap” between the selected metrics and the strategic goal that will be ignored during strategy implementation. In addition, the performance metrics used in the BSC system are established based on historical results. While managers and employees are working to achieve these historical metrics, changes in the current environment often go ignored. When it is discovered that managers and employees have been assigned metrics that do not further the strategic goals, the historical results are analyzed and new metrics are created.
A successful implementation of the strategic plan will require the alignment of the organization's resources and strategic initiatives with the organization's strategic vision. Recent advancements have focused on improving the predictive and analytical capabilities of a BSC system to make better predictions of the future and create better fits with strategic goals. There has been little advancement, however, in improving the day-to-day management of an enterprise's strategy implementation. Large enterprises, face new challenges every day and must be prepared to react to changes in their resources, environment and strategy. In today's world, the enterprise's ability to manage and accelerate organizational change has become an essential element of success.